Most of the news you hear about the dollar these days is doom and gloom. But the fact is, there’s hope for the American currency still. Read on to see what 10 experts say is the way to pull the dollar back on its feet.
Gary North, president of the Institute for Christian Economics: "To save the dollar, save a dollar."
Gary North believes that Americans need to get back to a personal finance policy of thriftiness. He argues that by saving, consumers would spend less on foreign goods, and therefore help close up the trade deficit that brings the dollar down.
Todd Wenning, The Motley Fool: "We shouldn’t forget that the currency markets are cyclical. The dollar will strengthen, then weaken, and then strengthen again, ad infinitum."
Tod Wenning believes that there’s nothing to be worried about. According to his belief, the dollar will rebound because the forces keeping it down currently will "reach equilibrium or even reverse the trend."
Robert Rubin, former US Treasury Secretary: "Our objective ought to be to have a strong currency based on sound policy."
Rubin’s solution is to keep government spending down while raising revenue. This means curbing entitlements like Social Security and Medicare, while increasing productivity though support of education, research and infrastructure.
Minos Zombanakis: "The dollar can no longer act as the sole reserve currency in the world."
Although Minos Zombanakis’ comment hails from 1979, his idea still holds true today. This banker, an expert on dealing with the Saudis, argues that "the dependence of the world on the dollar is not a blessing but a curse for America." Its status as a world currency allows US banks to flood the world market with dollars, so much so that they lose value.
Dean Baker, co-director of the Center for Economic and Policy Research: A weaker dollar is "the solution, not the problem."
Dean Baker sees little trouble from a faltering dollar, and argues that it’s just what we need. He argues that it helps keep trade balanced, and cheaper dollars create an incentive for foreigners to buy US goods. Alternately, a more expensive dollar is a boom to importers, making their goods cheaper.
David Malpass, Bear Stearns Chief Economist: "The Fed’s in a good position if it wanted to strengthen the dollar."
David Malpass believes the Federal Reserve can rebound the dollar by cutting rates. He explains, "by cutting rates well before economic weakness, it has room to express stronger interest in the dollar’s recovery." This, according to Malpass, would show a preference for the dollar and increase demand.
Ron Paul, Congressman and Presidential Candidate: "The root of this crisis, as with past financial and economic crises, results from federal government intervention into the economy."
Dr. Paul believes the trouble with the US economy and dollar is government intervention. In one of his most recent writings, he points to federal assistance as the culprit for the mortgage crisis, citing programs that allowed consumers to buy homes when they really weren’t prepared to do so. His answer to our money troubles is to let them work themselves out in the market by putting an end to government muddling.
Andrew Milligan, Standard Life Investments global strategy head: "The dollar will continue to go down until finally the rest of the world responds."
Although Andrew Milligan seems to express hope for the dollar, he doesn’t think the dollar’s rescue will come from the US. His prescription is to get foreign central banks to cut their interest rates. According to Milligan, this will happen when the dollar’s decline starts to impact corporate earnings in Europe.
Jim Rogers, Chairman of Beeland Interests: "Do your patriotic duty and help them get the dollar down."
Jim Rogers believes that in order to save the dollar, we have to drive its value down. He argues that we have to stop printing too many dollars and stop inflation. Otherwise, investors won’t support a currency that’s shooting itself in the foot.
Murray N. Rothbard, Austrian School of Economics: "Only privatization of the dollar can end the government’s inflationary dominance of the nation’s money supply."
Although Rothbard has passed on, his assertion that the dollar isn’t safe in the hands of the government rings true today. He asserts, "leaving the government and its central bank power to fine tune the money supply, but abjuring them to use that power wisely in accordance with various rules, is simply leaving the fox in charge of the proverbial henhouse." Rothbard believes that the currency must be separated from the state.